"Airbnb slashes spend in permanent shift from performance marketing to brand."
The article's headline quickly caught my attention, because it's a position I've supported for several years.
Do you know what true marketers call "performance marketing" and "growth marketing"?
Because all good marketing is about performance and growth. All of it, full stop.
But to paraphrase Roger "Verbal" Kent from The Usual Suspects, "The greatest trick online media companies ever pulled was convincing the world brand marketing wasn't important."
Brand marketing matters.
The problem with the terms "performance marketing" or "growth marketing" is that it implies all other forms of marketing are not about driving performance and growth. And for great marketers who are good at what they do, that's simply not true.
To be clear, "direct-attribution marketing" (the term I choose to use instead) also matters. When done well, it can drive significant results, especially in the early stages of a company when a brand has not yet been established.
The problem is that too many early-stage companies don't understand how a strong brand works -- how it can supercharge direct-attribution marketing and sales efforts -- and thus don't make any investments into building one. Direct-attribution marketing can help build a brand, but it's usually not enough.
Here's what happens when you have strong brands:
You're looking to purchase your first car, and instead of Googling, "best car to buy", you type a specific car manufacturer's website into your browser.
While online, you're presented with two almost-identical banner ads that have been (properly) targeted at you: one has a great headline and a picture of a shoe, and the other has that same great headline, that same picture of a shoe... and the Nike logo. You click the one with the Nike logo.
You tell your friend you're looking to get healthier, and they recommend a piece of fitness equipment they've been using for the past month because they love it and the community around it. So on your friend's recommendation, you order a Peloton.
Your salesperson walking into a meeting with a prospect, and the prospect says, "I've heard great things about your company and I'm excited to hear how you might be able to help us."
Strong brands drive results.
Once you've built a strong brand, you get to spend less money chasing clicks, where the companies that benefit the most are the ones collecting your marketing budgets.
And that's the reason Airbnb can cut their marketing budget "by more than half during the Covid-19 downturn" and still generate 95% of the same online traffic they did a year earlier. They've established a strong brand, and no longer need as much direct-attribution spend.
Without question, brand-building takes time, costs money, and is much more difficult to measure than direct-attribution marketing.
But the investment pays off in the long-run. It's not "performance marketing" or "brand marketing": smart companies know you need to invest in both.
I had a conversation yesterday with a potential consulting client, a very successful VP of sales. He told me that trying to find new customers in his niche target audience often felt like trying to find a small needle in a large haystack.
I smiled and said, "What you need is a big magnet."
A strong brand is like a big magnet: you can spend less time looking for the needle when the needle is drawn to you.